Owning outdated medical equipment can significantly affect your medical facility. For one, patients might feel uncomfortable and move to another facility, lowering cash flows. Purchasing new medical equipment or adding new medical technology is pretty expensive. That’s why most healthcare professionals turn to medical equipment financing.
A medical equipment loan can help you purchase the necessary equipment to increase patient satisfaction and boost your revenue. Here’s what you need to know about medical equipment loans and the available financing options.
What is Medical Equipment Financing?
Medical equipment financing is a small business loan that allows medical professionals to access the funding they need to purchase equipment. Typically, the equipment you plan to acquire serves as collateral, so you won’t need to back up the loan with your business or personal assets.
In most cases, when you borrow an equipment loan, you’ll receive a lump sum amount of money, repayable in fixed monthly payments plus interest and other pertinent fees. Once you pay back the borrowed amount in full, you’ll own the equipment outright.
Benefits of Medical Equipment Financing
There are several reasons medical professionals opt for medical equipment loans when sourcing an expensive piece of equipment. The following are some of the benefits of taking out medical equipment financing:
Improved Efficiency
A medical facility with modern equipment operates faster than those that use outdated equipment. With upgraded medical equipment, your medical practice will get the job done more efficiently, freeing up more time for medical workers to work on other tasks.
Upgrading medical technology or equipment can be an expensive venture. However, tapping into medical equipment financing can help improve efficiency.
Provide Patients with Better Care
For most healthcare facilities, patient care is of utmost importance. Medical equipment plays a crucial role in being able to provide better patient care. Updated medical equipment will help you serve your patients better while efficiently accomplishing everyday tasks. Medical equipment financing can help you get the necessary equipment to offer better patient care.
Updated Medical Equipment, Software, and Devices
Like anything else, medical equipment, software, and devices get outdated over time and should be updated regularly. Medical equipment financing offers quick access to funds to update medical equipment and use new technology to provide the best patient care.
Modernize with the Latest Medical Technologies
As with any other technology, medical technology regularly advances with enhanced features to provide better patient care. Updating to the latest medical technology is a worthwhile investment. With medical equipment financing, you’ll never miss an upgrade.
New and More Accurate Medical Procedures
Outdated equipment or technology can give inaccurate results, which will not only impact the reputation of your business but also make patients run away. With updated medical equipment, workers can provide more accurate medical procedures and bring in new patients. An equipment loan can help you acquire the needed tools to give error-free medical procedures.
Competitive Advantage with Latest Treatment and Testing Options
Adding new equipment to your medical facility gives you an edge over your competitors when it comes to the latest treatment and testing options. You’ll be able to provide new medical procedures and specialized treatments, thus bringing in new patients looking for the services. You can achieve all this with equipment financing.
Potential Tax Savings
Equipment financing can help you save on taxes. A Section 179 tax deduction may allow doctors and other healthcare professionals to qualify for a tax deduction on qualifying purchases, such as medical equipment and technology. Tax savings apply on new and pre-owned medical equipment.
Top 5 Options for Medical Equipment Financing
If you’re considering a medical equipment loan, here are the top five financing options to consider. Each funding option has different lending requirements, so knowing how each works will help you decide the right one for your business needs.
1. SBA Loans
SBA loans are small business loans partially guaranteed by the United States Small Business Administration and typically issued by approved financial institutions, such as traditional banks. Since the government backs these loans, they’re easy to qualify for and offer large loan amounts. They also have lower interest rates and longer repayment terms.
Borrowers can use SBA loans for various purposes, including working capital, business expansion, or purchasing equipment. SBA loans are typically ideal for small business owners who may otherwise not qualify for traditional loans.
2. Small Business Term Loans
A small business term loan is a type of traditional loan that offers a one-time amount of money repayable at fixed intervals with interest over a predetermined period. Business-term loans may either be short-term or long-term.
Repayment periods for term loans can go up to three years, and interest rates can be fixed or variable. Depending on your business needs and the lender, you can repay this type of loan weekly, biweekly, or monthly.
3. Working Capital Loans
A working capital loan is a short-term loan taken to cover everyday business operations. This can include covering payroll, buying inventory, or paying rent. Small business owners in the medical field can also tap into a working capital loan to finance equipment purchases.
4. Equipment Financing
Equipment financing is a loan used to purchase equipment for business purposes. For medical facilities, the equipment can include patient monitors, hospital beds, imaging machines, traction machines, defibrillators, and more. Whenever you take out an equipment loan, you’ll need to make regular payments of the principal plus interest over a fixed period of time.
The equipment itself typically acts as collateral. However, the lender may sometimes require a personal guarantee or lien on some of your business assets. If you default, the lender can seize and sell the assets to recoup the loan balance.
5. Business Line of Credit
A business line of credit (LOC) is a short-term loan that gives you access to financing to a certain limit on an as-needed basis. With a business line of credit, you can use as much or as little as you want just as long as you’re not over your credit limit and only pay interest on what you use, just like how a credit card works. Then, once you reach your draw limit and repay the funds, you borrow again.
A business LOC is suitable for medical facility owners looking for capital to finance short-term business needs, such as covering payroll, buying inventory, or a new piece of equipment.
Where to Get Medical Equipment Financing
Online small business lender ROK Financial could be a solution if you want to get medical equipment financing. They specialize in helping small businesses secure the funding they need to grow. If you have been in more than three months in business and have over $15,000 in monthly gross sales, you could qualify for equipment financing with ROK Financial, even with a less than perfect credit score.
Answer a few simple questions on this form to get in touch with an advisor to review medical financing options for your business.
